Scottish energy company SSE and Yorkshire outfit Drax have asked that Philip Hammond post a ‘robust and strong’ carbon price come the Autumn budget announcement.
In a letter to the UK Chancellor, both companies asked that he consider providing further clarity on the direction of the carbon price post-2020 so that they might plan future investment in fuel-efficient gas generation.
While the letter praised the release of the government’s new Clean Growth Strategy, it maintained a view that setting a ‘unilateral Carbon Price Floor’ has had a strengthening effect by providing clarity into the future.
The letter stated that such actions have ‘provided a striking example of what can happen when a meaningful carbon price is imposed on fossil fuel generation…without it generators have less clarity as they seek to deliver a new generation of efficient gas plant in the next capacity market auction in February 2018.”
“The budget announcement on 22 November presents an opportunity for the government to reaffirm its commitment to carbon pricing by providing clarity on the UK’s carbon price in the 2020s.”